MSC INCOME FUND, INC. current report, 26 July 2017

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Business Context and Reporting Period

Company: HMS Income Fund, Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: July 26, 2017
Event Reported: Entry into a Material Definitive Agreement regarding a fee waiver for the second quarter of 2017.

Key Financial Metrics

This filing does not report specific revenue, profit, cash flow, margin, debt, or liquidity figures. The document focuses exclusively on the terms of a conditional fee waiver agreement.

Material Changes and Agreements

On July 26, 2017, the Company entered into the Second Quarter 2017 Conditional Income Incentive Fee Waiver Agreement with HMS Adviser LP and MSC Adviser I, LLC. Key terms include:

  • Waiver Period: April 1, 2017, through June 30, 2017.
  • Waived Item: The "subordinated incentive fee on income."
  • Conditionality: The waiver is subject to potential repayment by the Company if a surplus exists in future quarters.
  • Repayment Priority: Surplus funds may be used to reimburse:
    1. Expense Support Payments (earliest year eligible first).
    2. Waived fees (earliest year eligible first).
  • Repayment Window: Up to three years from the date of the respective fee waiver.

Outlook, Risks, and Management Commentary

The filing indicates that the waiver is conditional upon the Advisers' sole discretion regarding the necessity of the waiver. A material contingency exists where the Company may be required to repay previously waived fees and expense support payments if future financial performance generates a surplus. No specific guidance or forward-looking financial projections are provided in this report.

Investor Verification Checklist

  • Verify the total amount of "Expense Support Payments" and waived fees eligible for potential repayment.
  • Review the full text of the Second Quarter 2017 Conditional Income Incentive Fee Waiver Agreement (Exhibit 10.1) for specific triggers defining a "surplus."
  • Monitor future quarterly reports for any board approvals regarding the reimbursement of waived fees.
  • Confirm the Company's current cash position to assess the likelihood of future surplus generation.